A big move in the travel site world today: Priceline just agreed to buy Kayak for $1.8 billion in a cash and stock deal, the companies just announced.
Priceline will pay $500 million in cash, and the remaining $1.3 billion will come from equity and stock options. Both boards have approved the deal, but the companies are still awaiting shareholder and regulatory approval. The deal is expected to close late in the first quarter of 2013.
Both sites simplify searching for travel items like flights and hotels, though Kayak goes the extra mile by allowing you to search multiple travel sites at once. Judging from the release, it sounds like Priceline is particularly interested in Kayak’s search tech and design chops (it’s notably cleaner than most other travel sites).
The acquisition follows Kayak’s successful IPO and revenues of $76.9 millionfor its first quarter.The company was scheduled to release its third quarter earnings today.
Kayak priced its stock at $26 for its debut, and with this deal the company is worth a hefty $40 per share. The Norwalk, Connecticut-based company now processes 100 million queries a month. It previously raised $223 million from investors including Accel Partners, Sequoia Capital, General Catalyst Partners, Lehman Brothers, Norwest Venture Partners, and Aol.
“Kayak has built a strong brand in online travel research and their track record of profitable growth is demonstrative of their popularity with consumers and value to advertisers,” Priceline Group chief executive Jeffery H. Boyd said in a statement today. “Kayak also has world class technology and a tradition of innovation in building great user interfaces across multiple platforms and devices. We believe we can be helpful with Kayak’s plans to build a global online travel brand.”